For Purpose Aged Care Australia (FPACA), the aged care provider established by social impact investment vehicle For Purpose Investment Partners (FPIP), is buying 14 aged care homes – eight on the ground and six in development – from Graeme Croft, the founder and director of private residential aged care operator Signature Care.
The sale price is confidential but based on our back-of-envelope calculations of $350,000 a bed, the overall price tag is north of $765 million.
In June last year, FPACA Chair Toby Hall had flagged the Not For Profit’s intention to expand to 5,000 beds and independent living units over the next three to five years backed by its unique social impact fund and a social loan from NAB.
Now the aged care provider is halfway to its target, acquiring 1,089 online beds and another 1,100 in varying stages of development from prolific builder Graeme Croft.
The acquisition is the second for FPACA, which acquired private Melbourne provider Luson Aged Care and its 305 beds across three aged care homes plus one 136-bed development site last March.
Backed by an $85 million commitment from institutional investors, this latest deal takes FPACA into the top 15 largest aged care providers in Australia with 1,394 aged care places, growing to over 2,500 in the next two years across 18 sites in New South Wales, Victoria, Queensland, and Western Australia.
FPACA appoints Group CEO
FPACA has also appointed a new Group CEO Matthew Filocamo, a Non-Executive Director at FPACA and previously the Director of Operations at RSL LifeCare and Calvary Health Care to lead the unified group.
“This is a transformative moment for FPACA and the broader aged care community in Australia,” said FPACA Chair Toby Hall (pictured above left).
“The acquisition of Signature Care is a strategic step that aligns with our mission to deliver exceptional care services to Australians from all backgrounds.”
“We are very excited to reach an agreement to acquire Signature Care,” added FPIP Founder and Executive Director Michael Traill AM.
“We believe investors like FPIP have an important role to play as stewards of these crucial social assets going forward, ensuring residents get a great experience at an affordable price while also making sure that the business is run in a manner that delivers appropriate risk-adjusted returns for investors and attracts further capital to a sector which badly needs it.
“The business is in great hands led by Matt and supported by Toby as Chair, and we will look to support them to continue to grow the business.”
“The ideal time to sell”: Graeme Croft
Graeme (pictured above right) told The Weekly SOURCE that he has been in the aged care business for 40 years and now seemed like the ideal time to hand the reins to someone else.
“They are getting a good group of homes that are built to scale and very modern, but the other side of it is that they are Not For Profit. They have so many other advantages that we don’t have in operations. I think there’s about $80 to $100 million saving in payroll tax alone for them.”
It’s not the first time that Graeme has sold out of aged care. In 2012, Bupa acquired 10 aged care facilities from his Innovative Care brand – a total of 1,114 beds – for $225-plus million.
The development arm of Signature Care will continue to design and build new homes, however.
“It’s a well-oiled machine, and we have great expertise in our office to keep doing this,” said Graeme.
The transaction is contingent on receiving the necessary approvals from the Department of Health and Aged Care. The parties were introduced by the specialist aged care & retirement living agents, Amicum with FPIP advised by Gilbert + Tobin and PwC, and Signature Care advised by K&L Gates, Madgwicks Lawyers and Deloitte.
